By Michael Eboh
Professor Uche Uwaleke of the Finance and Capital Market Department of the Nasarawa State University, Lafia, has stated that Nigerians should not lose sleep over the reported planned exit of Shoprite from the country, as it is positive for the country’s Foreign Direct Investment, FDI.
In a statement in Abuja, Uwaleke, who is also former Commissioner for Finance in Imo State, disclosed that if Shoprite leaves, it will have a positive impact on Nigeria’s foreign exchange reserves and had promoted the consumption of imported commodities in the country.
Uwaleke noted that Shoprite’s exit would not have any significant negative impact on the Nigerian economy, stating that its exit would create opportunities for new companies to emerge in the space.
He said: “The exit of Shoprite, or any other foreign business for that matter, ordinarily should be a cause for concern, especially for a country like Nigeria that is in dire need of foreign direct investment.
“The importance of Foreign Direct Investment, especially in the area of job creation, cannot be over-emphasised. With particular reference to Shoprite, the big question is: what is the net contribution of the company to the Nigerian economy?
“Beyond the menial jobs, how many Nigerians are in the employ of the South African firm? Aside from the crowding-out effect of Shoprite on local competitors, its operations in Nigeria have also contributed to dwindling foreign reserves through imports that serve to satisfy the appetite of wealthy Nigerians for foreign goods.
“I think the type and quality of FDIs should matter for Nigeria. What the country needs now are foreign direct investments in manufacturing, agriculture value chain, telecommunication and information technology, and not businesses that promote the consumption of foreign goods and perpetually leave us import-dependent.
“Which is why I think Nigerians should not lose sleep over the exit of Shoprite. Where possible, the company should be bought over by Nigerians. As Shoprite is exiting, some other companies are waiting to berth.
“The right business environment post-COVID-19 will bring this about. The country’s economic potentials and market size are such that the world cannot ignore.”